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Document Type: PC - Public Clarification
Guidance Code: CTP004
Year: 2024
Related Law: uae-cit-fdl-47-of-2022
Authority: Federal Tax Authority

Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for certain Tax Periods - CTP004

CTP004 - Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for certain Tax Periods

CTP004

Corporate Tax Public Clarification

Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for certain Tax Periods

Issue

Corporate Tax in the UAE is regulated by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments ("Corporate Tax Law"), and its implementing decisions.

The Corporate Tax Law gives the Federal Tax Authority ("FTA") the right to provide an alternative deadline for Taxable Persons to file a Tax Return[1] and settle the Corporate Tax Payable. [2]

Therefore, the FTA Decision No. 7 of 2024 on the Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for Certain Tax Periods for the Purposes of Federal Decree- Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments ("FTA Decision No. 7 of 2024") has been issued to postpone such deadlines.

FTA Decision No. 7 of 2024 is effective from 25 September 2024.

This Public Clarification intends to clarify the new deadline by which certain Taxable Persons are required to file a Tax Return and settle the Corporate Tax Payable with the FTA for Corporate Tax purposes, and to whom this extension applies.

Summary

All Taxable Persons are required to file a Tax Return for Corporate Tax to the FTA and settle the Corporate Tax Payable with the FTA by no later than nine months from the end of the relevant Tax Period, or by such other date as directed by the FTA. [1] [2]

FTA Decision No. 7 of 2024 specifies that all Taxable Persons incorporated, established or recognised under the applicable legislation of the State on or after 1 June 2023, and with a Tax Period that ends on or before 29 February 2024 shall now file their Tax Return and settle their Corporate Tax Payable by 31 December 2024. [3] [4]

This decision will not apply to any Taxable Person whose Tax Period ends after 29 February 2024.

Administrative Penalties which reference the deadline for the submission of the Tax Return or the due date settlement of Corporate Tax Payable for such Taxable Persons will, therefore, apply from 1 January 2025.

Detailed analysis

The analysis explains the new deadline to submit the Tax Return and pay the Corporate Tax Payable, and provides examples of how such deadline applies to Taxable Persons with different Tax Periods.

The Taxable Persons affected by FTA Decision No. 7 of 2024 are only those with a short Tax Period ending on or before 29 February 2024, e.g. Tax Periods ending on 31 December 2023, 31 January 2024 or 29 February 2024.

Therefore, this decision applies to Taxable Persons whose obligation to file a Tax Return for Corporate Tax and settle the Corporate Tax Payable is as follows:

  • Taxable Persons with a short Tax Period ending 31 December 2023 whose obligation to file a Tax Return for Corporate Tax and settle the Corporate Tax Payable with the FTA is by 30 September 2024 - this includes juridical persons that were incorporated in June 2023 or on 1 July 2023 in the UAE and have a January to December Financial Year.

  • Taxable Persons with a short Tax Period ending 31 January 2024 whose obligation to file a Tax Return for Corporate Tax and settle the Corporate Tax Payable with the FTA is by 31 October 2024 - this includes juridical persons that were incorporated in June 2023, July 2023, or on 1 August 2023 in the UAE and have a February to January Financial Year.

  • Taxable Persons with a short Tax Period ending 29 February 2024 whose obligation to file a Tax Return for Corporate Tax and settle the Corporate Tax Payable with the FTA is by 30 November 2024 - this includes juridical persons that were incorporated in June 2023, July 2023, August 2023 or on 1 September 2023 in the UAE and have a March to February Financial Year.

  • Taxable Persons with a short Tax Period because they ceased to exist, ceased their Business, dissolved, liquidated or otherwise on or prior to 29 February 2024. [5]

Taxable Persons should verify their first Tax Period by referring to Public Clarification CTP003 on the first Tax Period of a juridical person.

Example 1

Company A was incorporated in Ras Al Khaimah on 12 June 2023 and it chose its Financial Year to be January to December.

Company A's first Tax Period is 12 June 2023 to 31 December 2023.

Prior to the entry into effect of FTA Decision No. 7 of 2024, Company A would have had to file its Tax Return and settle the Corporate Tax Payable by 30 September 2024.

However, based on FTA Decision No. 7 of 2024, the deadline to file the Tax Return and settle the Corporate Tax Payable is now 31 December 2024.

Example 2

Company B was incorporated in Abu Dhabi on 26 June 2023 and it chose its Financial Year to be June to May.

Company B's first Tax Period is 26 June 2023 to 31 May 2024.

Since Company B's first Tax Period ends on 31 May 2024, FTA Decision No. 7 of 2024 will have no effect on Company's B's deadline to file a Tax Return and settle the Corporate Tax Payable.

Company B's deadline to file a Tax Return and settle the Corporate Tax Payable will continue to be 28 February 2025, i.e. 9 months from the end of the relevant Tax Period.

Example 3

Company C was incorporated in Ajman on 6 July 2023 and it chose its Financial Year to be February to January.

Company C's first Tax Period is 6 July 2023 to 31 January 2024.

Prior to the entry into effect of FTA Decision No. 7 of 2024, Company C would have had to file its Tax Return and settle the Corporate Tax Payable by 31 October 2024.

However, based on FTA Decision No. 7 of 2024, the deadline to file the Tax Return and settle the Corporate Tax Payable is now 31 December 2024.

Example 4

Company D was incorporated in Fujairah on 13 August 2023 and it chose its Financial Year to be March to February.

Company D's first Tax Period is 13 August 2023 to 29 February 2024.

Prior to the entry into effect of FTA Decision No. 7 of 2024, Company D would have had to file its Tax Return and settle the Corporate Tax Payable by 30 November 2024.

However, based on FTA Decision No. 7 of 2024, the deadline to file the Tax Return and settle the Corporate Tax Payable is now 31 December 2024.

Example 5

Company E was incorporated in Umm Al Quwain on 30 May 2023 and it chose its Financial Year to be January to December.

Company E's first Tax Period is 1 January 2024 to 31 December 2024, i.e. the first Financial Year commencing on or after 1 June 2023.

Since Company E's first Tax Period ends on 31 December 2024, FTA Decision No. 7 of 2024 will have no effect on Company's E's deadline to file a Tax Return and settle the Corporate Tax Payable.

Company E's deadline to file the Tax Return and settle the Corporate Tax Payable will continue to be 30 September 2025, i.e. 9 months from the end of the relevant Tax Period.

Example 6

Company F was incorporated in Sharjah on 18 June 2023 and it chose its Financial Year to be January to December.

Company F's first Tax Period is 18 June 2023 to 31 December 2023.

On 31 August 2024, Company F filed its Tax Return for its first Tax Period.

On 31 October 2024, Company F submits a Voluntary Disclosure in relation to the Tax Return.

Prior to the entry into effect of FTA Decision No. 7 of 2024, Company F would have been subject to an incorrect Tax Return penalty of AED 500 for correcting its Tax Return after 30 September 2024, the deadline to file a Tax Return. [6]

However, based on FTA Decision No. 7 of 2024 , the deadline to file a Tax Return is now 31 December 2024, hence, the incorrect Tax Return penalty will not apply.

This Public Clarification issued by the FTA is meant to clarify certain aspects related to the implementation of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Business, and its amendments, Cabinet Decision No. 75 of 2023 on the Administrative Penalties for Violations Related to the Application of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, and its amendments, FTA decision No. 7 of 2024 on the Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for Certain Tax Periods for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments.

This Public Clarification states the position of the FTA and neither amends nor seeks to amend any provision of the aforementioned legislation. Therefore, it is effective as of the date of implementation of the relevant legislation, unless stated otherwise.

Legislative References:

In this clarification, Federal Decree-Law No. 28 of 2022 on Tax Procedures is referred to as "Tax Procedures Law", Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Business and its amendments is referred to as "Corporate Tax Law", Cabinet Decision No. 75 of 2023 on the Administrative Penalties for Violations Related to the Application of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses is referred to as "Cabinet Decision No. 75 of 2023", and Federal Tax Authority Decision No. 7 of 2024 on the Postponement of the Deadline to File a Tax Return and Settle the Corporate Tax Payable for Certain Tax Periods for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments is referred to as "FTA Decision No. 7 of 2024".

Article 1 of the Tax Procedures Law defines "Voluntary Disclosure" as a form prepared by the FTA pursuant to which a Taxpayer notifies the FTA of an error or omission in the Tax Return, Tax Assessment or Tax refund application, in accordance with the provisions of Article 10 of the Tax Procedure Law.

Article 1 of the Corporate Tax Law defines the following terms as:

  • "Administrative Penalties" – Amounts imposed and collected under the Corporate Tax Law or the Tax Procedures Law.

  • "Corporate Tax" – The tax imposed by the Corporate Tax Law on juridical persons and Business income.

  • "Corporate Tax Payable" – Corporate Tax that has or will become due for payment to the FTA in respect of one or more Tax Periods.

  • "Financial Year" – The period specified in Article 57 of the Corporate Tax Law.

  • "Tax Period" – The period for which a Tax Return is required to be filed.

  • "Tax Return" – Information filed with the FTA for Corporate Tax purposes in the form and manner as prescribed by the FTA, including any schedule or attachment thereto, and any amendment thereof.

  • "Taxable Person" – A Person subject to Corporate Tax in the UAE under the Corporate Tax Law.

[1] Article 53(1) of the Corporate Tax Law states that subject to Article 5 of the Corporate Tax Law , a Taxable Person must file a Tax Return, as applicable, to the FTA in the form and manner prescribed by the FTA no later than (9) nine months from the end of the relevant Tax Period, or by such other date as directed by the FTA.

[2] Article 48 of the Corporate Tax Law states that a Taxable Person must settle the Corporate Tax Payable under the Corporate Tax Law within (9) nine months from the end of the relevant Tax Period, or by such other date as determined by the FTA.

[3] Article 2(1) of FTA Decision No. 7 of 2024 states that for the purposes of Article 53(1) of the Corporate Tax Law , the deadline to file a Tax Return to the FTA shall be no later than 31 December 2024, where all of the following conditions are met:

  • The Taxable Person was incorporated, established or recognised under the applicable legislation of the UAE on or after 1 June 2023.

  • The Tax Period of the Taxable Person ended on or prior to 29 February 2024.

[4] Article 2(2) of FTA Decision No. 7 of 2024 states that for the purposes of Article 48 of the Corporate Tax Law , the deadline to settle the Corporate Tax Payable shall be no later than 31 December 2024, where all of the following conditions are met:

  • The Taxable Person was incorporated, established or recognised under the applicable legislation of the UAE on or after 1 June 2023.

  • The Tax Period of the Taxable Person ended on or prior to 29 February 2024.

[5] Article 52(2) of the Corporate Tax Law states that a Taxable Person shall not be deregistered unless it has paid all Corporate Tax and Administrative Penalties due and filed all Tax Returns due under the Corporate Tax Law, including its Tax Return for the Tax Period up to and including the date of cessation.

[6] Violation No. 9 of the Table of Violations and Administrative Penalties annexed to Cabinet Decision No. 75 of 2023 states that a Registrant who submits an incorrect Tax Return will be levied with an Administrative Penalty of AED 500, unless the Person corrects his Tax Return before the expiry of the deadline for the submission of the Tax Return according to the Corporate Tax Law.